What every supply chain leader in today’s turbulent world really needs is an in-house Nostradamus – someone who can see into the future and prevent further disruption, from whatever catastrophes may arise. is future-proofed for disrupted supply chains.
But seers blessed with supernatural insight are thin on the ground, at least in B2B circles; I didn’t find any on LinkedIn. And so businesses need to do the next best thing to making supply chains more resilient: visibility.
Having a clear, end-to-end picture of one’s supply chain at any moment in time is the goal. As the past two years of conveyor-belt shocks to supply chains have shown us, perspective has never been more important.
But knowing what is needed and achieving it are two very different things.
A recent CIPS & Deloitte report on procurement and supply chain sustainability shows that rather than being transparent, the supply chains of most public and private sector organizations are positively opaque.
The thrust of the report is that organizations are failing to measure the environmental impact of their supply chains – largely because they can’t see it – but its findings are symptomatic of a wider trend in organizations that lack supply chain visibility.
Only 13% of companies have supply chain visibility – Deloitte
The report found that only 13% can map their entire supply chain network, and that up to 22% have no visibility beyond their suppliers.
So, with this in mind, we asked a supply chain perspective expert to guide us through the business benefits of the ‘Nostradamus Effect’ and why it’s important that organizations are at least prepared for the future – even if they can’t see it. .
Ryan Closser is the Director of Project Management & Network Collaboration at FourKites, which connects global end-to-end supply chains through real-time visibility technology to help shippers, carriers, and 3PLs to work together better.
Closser says: “In many ways, supply chains are still struggling in the modern age of technology, as the lack of real-time data and cross-company collaboration often hinders their development and evolution.
“For example, if your terms of shipment are not collected, you may not be able to see what is coming into your facilities. This lack of visibility can lead to production delays and stockouts below the point of sale.
He added: “A transparent supply chain enables you to see everything, including whether shipments are in transit, in the warehouse or distribution center, and where they will be later. The expansion of visibility into every corner of your supply network unlocks business value through a variety of benefits.
Here, Closser runs us through some of the most valuable benefits.
Better strategic planning Few companies directly manage their entire supply chain, from raw materials to shipping finished products. By mapping the entire lifecycle and knowing where everyone is at all times, companies can better plan for all possible scenarios.
This connection that exists between planning and reliable travel times allows us to be prepared for any change in volume and take care of the urgency that we can have with production changes.
Monitoring and implementation of benchmarking Visibility doesn’t just help with planning; it is important to measure the performance of your plan, to ensure that you can measure the effectiveness of any changes you make in the future.
This gives operating teams more data to monitor operations in their region or site, meaning they can have more productive conversations with providers, as well as being able to drive improvements.
Reduce shipping fees With hundreds of different systems used by carriers and freight forwarders, updates about milestones or ETAs often arrive late or inaccurate, causing delays or excessive dwell time and, therefore, additional demurrage and detention charges.
Visibility allows the underlying logistical issues causing the delays to be directly addressed. You can’t answer what you can’t measure.
Improve lead times Instead of constantly reacting to delays and exceptions, supply chain professionals should constantly review their network design to identify the best patterns in their inventory flow. Such optimization is useless unless you account for 100% of your network.
Better supplier collaboration With deep insight and data you can answer critical questions about your supplier base. Questions like: How many suppliers make the most sense? Are my suppliers cooperating?
Being a preferred supplier is a big deal for many organizations because it helps them grow.
Increased customer and partner satisfaction Imagine being able to proactively communicate with customers or resolve an issue before it becomes a problem. When employees have real-time insight into every shipment, no matter where – no matter who owns the container or warehouse it’s in – they can.
The better you can collaborate and collaborate with your carriers, the more effective you will be in delivering the expectations of your customers, which is, in the end, what it is all about.
Increase productivity Happy customers mean happy employees. No one wants the mind-numbing task of manually tracking and tracing each shipment, and even fewer want to do it after being yelled at by an angry customer.
The ability to track details at the stock-keeping-unit (SKU) level – of both handled and unhandled shipments – with network visibility improves warehouse and labor productivity.
Optimize reverse logistics Returned items are probably a black hole in your network – this means that 15% of your inventory is not being found. Where a specific part or a SKU order from a vendor can take weeks, you can now bulk load it somewhere within your network.
By gaining full visibility, you can improve the order of the inventory and, on top of that, reduce the credit cycle by knowing when the custody of the cargo will change.
The vision is a sustainable supply chain benefit The thing about Scope 3 emissions is that many of the biggest sources are those over which a business has little-to-no direct control. But investing in greater visibility can help you spot where inefficiencies are occurring so you can influence a better outcome and hit your sustainability targets.
